ECOCLUB, Issue 94
9
cases, the
disability is long-term or permanent. In both cases, employment income, and sometimes
business income, is
interrupted.
LOSS OF KEY INDIVIDUALS - Many companies rely on one or two special people in critical positions. It may be the owner
of the company who is still the most popular
guide for upper end clientele. The loss of key individuals could jeopardize the
operation until a replacement is found.
MEDICAL - If a customer were to be injured or become ill in a remote location, the
evacuation or treatment of that person
could become your responsibility.
PUBLIC LIABILITY - This is the area often associated with insurance claims and of particular interest to ecotourism providers.
If someone is injured during a rafting trip or comes down with food poisoning on a day hike, you could be held responsible for
the losses and stress suffered by that person, or in worst case scenarios, by that person’s surviving family. You could also be
held liable for the actions of contractors or suppliers you use to deliver part or all of your ecotourism product. Losses in these
areas could severely affect your business operations. To prevent this from occurring, you can take action in several areas. You
can undertake a program of safety management to minimize the potential of accidents occurring in the first place. In conjunction
with this, you can assess those areas where you have the greatest risk and
obtain insurance to absorb the financial cost of an
illness, accident, or property loss. You may also be able to reduce your risk by contracting out some services. If you contract
with a canoe outfitter to provide canoes for your trips, the insurance for the canoes should be covered by the outfitter, resulting
in lower insurance costs for you.
Where you do use contractors, you need to clarify what risk they are assuming and
obtain
proof of insurance.
LEGAL LIABILITY
Of prime concern is the threat of legal action arising from the operation of your business. The areas most relevant to ecotourism
providers are:
· Tort claims
· Doctrine of respondeat superior
· Contract law
· Product liability
TORT CLAIMS - include liability for negligence or gross negligence. If an operator is found to have not acted carefully in a
circumstance (negligence), or even when facing danger acted with some degree of recklessness (gross negligence), he may be
liable to the customer. While the use of waivers may prevent losses in the case of negligence, they may not be effective where
gross negligence is proven. Another
possible tort claim can arise in the area of strict liability. If an activity is found to be
“inherently dangerous” by a jury, the operator could be liable.
DOCTRINE OF RESPONDEAT SUPERIOR - An employer is responsible for the actions of employees as they execute their
job duties. It extends responsibility for negligence from the individual employee to the employer.
CONTRACT LAW - Involves the many agreements signed between operators and their suppliers and clients. Suppliers who fail
to deliver services as set out in the agreement would be liable under contract law for losses incurred. If you advertise specific
experiences or accommodation quality, you could be held liable if you do not deliver as advertised.
PRODUCT LIABILITY - A concern for operators who provide equipment for their tours. If a product fails and injury results,
the customer could take legal action. For this reason, it
best to deal with equipment manufacturers who sell high-quality
equipment and stand behind their product, i.e. they carry insurance for this situation.
INSURING AGAINST THE ODDS
To mitigate the consequences of legal action or to soften the loss of property or income, insurance is desirable. In some cases, it
may be mandatory. Before you are able to obtain licenses or permits in many national parks, you are required to have proof of
public-liability insurance.
Justified or not, many insurance companies perceive ecotourism and adventure travel
as high risk and charge higher
premiums, or in many cases, choose not to offer insurance
at all. Make sure insurance cost is factored into the cost of your
product. Where a trip requires higher insurance premiums, there should be a higher price.
Finding a good carrier may take some work. Ask other ecotourism operators in your area what insurance companies they use
and make inquiries through them. Compare rates to ensure you are receiving the best rate. Be prepared to spend several hundred
dollars annually on public-liability insurance for “low risk” activities such as guided nature hikes. White-water rafting,
kayaking, or roped climbing may cost thousands of dollars, if you are even able to obtain insurance…
Unfortunately some operators are unable to obtain insurance for an activity or cannot afford the premiums. They may elect to
operate in areas where insurance is not required and hope that no accidents occur. Often they have few assets or have structured
